The Mortgage Process: From Prequalification to Closing

Going through the mortgage process is not always the simplest thing in the world, especially for a first-time homebuyer but is often easier to go through when you understand the main steps. If this is your first time buying a house with a loan, here are the main steps you will likely complete in the mortgage process.

The first step you should take when you want to buy a house is getting prequalified. Getting prequalified involves talking to a lender who offers mortgage loans to find out if you qualify for a loan.

During this step, you will typically not have to submit any financial documents to prove your income, job, or debts. Instead, you will simply have a conversation with a lender about your finances, and this initial conversation can help you determine if you are prequalified or not.

If you do not meet the guidelines for a loan at this time, the lender can help you understand what you can do to meet the necessary guidelines. You can then take this advice to begin working on improving your financial situation so you can qualify for a loan sooner.

The second step in the process is getting preapproved. If the lender tells you that you are prequalified, you should continue by asking for a preapproval. For a lender to preapprove you, you must submit proof of your income, job, and debts. Getting preapproved requires verification of the information you submit.

Getting prequalified helps you know if you should apply for a loan, while getting preapproved helps you know that you actually do meet the guidelines needed to get a loan. When you get preapproved, you have more certainty that the lender will approve you for a loan when you are ready for one.

The preapproval will also help you understand the terms of the loan. Preapproval will tell you the type of loan package you qualify for, the amount of money you need for a down payment, the amount of money you can borrow, and the interest rate of the loan.

The next step you will go through is the verification process of the house you want to buy. During this step, the lender will order title work, an appraisal, and inspections. The purpose of these steps is to ensure that the house you buy is worth the price you offered to pay. Lenders do this to reduce the risks they have when issuing loans.

When the inspections, title work, and appraisal are complete, the entire file goes to underwriting. Underwriting is a process that takes the verification process one step further. The underwriters will verify every detail about the house and your financial situation. If everything is good, you can move towards the last step in the mortgage process.

The last step in the mortgage process is the closing. The closing is an appointment where you will sign all the documents for the loan, including the promissory note and the mortgage. Once you sign every document needed, you will receive the keys to the house you purchased, and the mortgage process will be complete.

If you would like to find out if you currently qualify for a loan, do so by contacting Cornerstone Residential Mortgage. We can help you find the right loan product for your situation and needs, and we would love to speak to you today about your questions and concerns.